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War in Ukraine: Aftershocks & Implications One Year Later

A single bullet meant for a rifle or a machine gun is set atop a pile of grain. Meant to represent the global impact of the war in Ukraine.

The TD Cowen Insight

One year into the war, rapid de-linkage has occurred between U.S.-EU & Russia. Geopolitical economic changes remain unpredictable. EU/NATO politics, defense, and energy have experienced seismic shifts. Economic consequences, nuclear escalation & war fatigue remain valid unknowns. Defense, energy, and cybersecurity sectors present clear opportunities. Other sectors face mixed-but-known risks.

Bottom Line Up Front

The unthinkable – a major war in Europe – is reality, and the aftershocks will be enduring. Brutal 1H23 fighting could prompt major strategy changes.

Washington Policy Expectations


We expect higher multiyear defense spending in Europe (and likely U.S.). Weapons output headed for major multiyear increases. War is accelerating adoption of new technologies.


New aid package expected, but passage could be year-end. Larger issue is 2024 presidential race where GOP support for aid is viewed in a much more skeptical/critical light.


For now, inflation & affordability outweigh climate policy, and energy security, which is now a fundamental pillar of energy transition. The U.S. is fully committed to a gas-enabled energy transition.


Sanctions have not hurt the Western financial system or USD as a global reserve currency. Additional actions could encourage non-Western countries to consider alternatives offered by China.

Sector/Equity Analyst Expectations


Air traffic to Ukraine remains suspended. Specialty retail & brands inventories remain elevated, but supply chains are improving. Restricted access to Russian tobacco market is negative but global markets remain resilient.

Defense & Industrials

The conflict should bolster demand for major land warfare equipment and F-16 fighters, which would then benefit suppliers.

Sustainability & Energy

Renewables adoption continues in the EU to diversify from Russian gas while the conflict impacts raw materials used for batteries & chargers that support EV growth. U.S. LNG remains a natural beneficiary & the energy security part of the investment case for U.S. producers.

Cyber & Information Security

The conflict galvanizes industry & governments to secure IT infrastructure. Coverage has limited regional exposure, but war elevates global demand.

IT & Business Services

The future of tech services & software development exports from Ukraine remains fluid. The industry is critical to Ukraine’s economy & showed resilience in 2022 with growth of 5.8%, though notable deceleration vs. the prior 10-year CAGR of ~27%.